ANNOUNCEMENTS
WHO announces the new air quality guidelines in light of rising threats of air pollution on human health and climate change. Various countries have commenced regulating air pollution to achieve these recommended levels of air quality. While a great deal of literature has been published on the benefits of regulating it, less attention has been focused on the economic costs that come along with these regulations. This study assesses the impact of air quality regulations on the labour market indicators in India using a multi-sectoral computable general equilibrium (CGE) model developed with GTAP. The results show that air quality regulations generate higher output levels across all sectors along with higher real GDP by 0.57%. While the output rises across all sectors, the labour demand falls in many sectors. This is due to a rise in labour productivity across all sectors. The worker’s earnings rise by 0.64% and 0.59% whereas their real wages rise by 0.67% and 0.61% for the skilled and unskilled labour force respectively. While, the labour market gets reshaped as the regulations are placed, with labour getting reallocated from more polluting sectors to lesser ones, effective labour market policies need to be accommodated along with these regulations which could ease the transition to a green economy.
Keywords- air quality regulations, multi-sectoral CGE model, output, labour demand, productivity, earnings, GDP.
